A consumer has a demand curve for doctor's visits per year given by x = 30 p. Suppose that it costs $10 to visit the doctor.

1. How many times does the patient visit the doctor in a year?

2. Suppose that we introduce a co-insurance of 50% so that the patient now only pays 50% of her yearly medical bill and the insurance company pays the rest.

(a) What quantity does the consumer now consume?

(b) How much does the consumer pay?

(c) How much does the insurance company pay?

3. Now suppose that the insurance company uses a deductible of $100.

(a) What quantity does the consumer now consume?

(b) How much does the consumer pay?

(c) How much does the insurance company pay?

4. Instead of a deductible suppose that the insurance company implements a stop-loss of $150. What is the consumer's demand both with and without co-insurance? (a) How much does the consumer pay?

(b) How much does the insurance company pay?

5. Now, suppose that we have a 50% co-insurance rate, a $100 deductible and a $150 stop-loss.

(a) What is the consumer's demand?

(b) How much does the consumer pay?

(c) How much does the insurance company pay?